Srinagar, May 19 (PTI) Jammu and Kashmir Finance Minister Haseeb Drabu today termed the GST Council, which held its 2- day meeting here, as the country’s first federal institution saying the new tax regime will pave way for cooperative federalism.

The Goods and Services Tax (GST) regime will bring “major changes in fiscal and political side of India’s federal structure because of which coercive federalism will pave way for cooperative and competitive federalism”, Drabu said here at a roundtable of the finance ministers of various states.

He said the new indirect tax regime has sown the seeds of lateral federalism by recognising the new political, economic and social realities in the country.

“The economic reforms ushered in 1991 did not seek to consult the states. Now in 2017, with the GST being rolled out on July 1, every single state has been taken on board.

“This is one step which compliments other moves and changes the structure of Indian federalism,” Drabu said, adding that the GST should be looked at more in terms of changing federal polity across the country.

He said the GST will institutionalise tax collection and increase compliance tremendously, thereby making India a better and a vibrant country.

“While there may be issues of sovereignty and autonomy, the GST Council is India’s first federal institution and we would like to see more moving ahead,” he said.

The roundtable was also attended by the finance ministers of Assam, Kerala and Karnataka, among others.

Welcoming them to Kashmir, Drabu said it is important to send out a signal to the rest of the country about the state of affairs in Jammu and Kashmir.

“There is a multi-layered reality to life in Jammu and Kashmir. While we have been dealing with the prevailing situation on one hand, it does not stop life here,” he said.

“We are witnessing economic history in making in this beautiful city of Srinagar in an incredible manner through pooling of sovereignties. Nothing can make us prouder,” he added.

Assam Finance Minister Himanta Biswa Sarma said people of Kashmir are known for their hospitality and they have outdone themselves this time.

“The state government has done a wonderful job. The impression from outside the Valley about the situation is wrong. Although there are incidences of violence happening, a fair amount of normalcy prevails,” he said.

The 2-day meeting of the all powerful GST Council, its 14th so far, has decided on tax rates to be levied on various services under the GST regime which will kick in from July 1.

GST has been billed as the biggest tax reform since the Independence and seeks to have uniform taxation for various goods and services across the country, uniting it as a single market by subsuming a plethora of state and central levies.